We followed up on iLounge and BBGadgets' finds this weekend about rumors that the iPod Shuffle has an authentication chip in its headphone controller in order to work with the new control scheme. It does. Updated

iLounge was apparently first mention the presence of a possible authentication scheme, and Boing Boing Gadgets was the first to find some kind of chip inside the headphones—whether or not it was an authentication chip was unknown.

V-Moda, one of the manufacturers who announced shuffle-compatible headphones last week, just confirmed to us that yes, an "authentication chip IS required to enable to volume control functionality with the new shuffle (as well as the latest gen of iPod and MacBooks)." The difference here is that iPods and MacBooks worked with headphones that didn't have the authentication chip. The shuffle does not. Update: This statement was retracted by V-Moda. See bottom of post for details.

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V-Moda also says that they've collaborated with Apple for the past few months developing the technology. It seems safe to conclude two things. One, manufacturers who want their headphones to work with the shuffle need to work with Apple in order to get access to the tech inside the authentication chip. Two, only people who Apple "like" are going to get this tech and make compatible headphones—but it's likely that Apple likes almost anybody with the money to pay for licensing.

Whatever the consequences, it does look like Apple is going down the path of locking down headphones, hoping to crunch out another revenue stream from all the manufacturers offering ways of getting sound from your iPod to your ears, whether it be through earbuds or through car adapters.

Update: Another source, plus the original contact at V-Moda, are telling me something different about the chip. V-Moda is retracting their original statement and saying "it is NOT an authentication nor a DRM chip", which I am trying to get clarification on now. The other source says it's supposedly closer to a proprietary control chip that houses the new control scheme, and is an "additional component for the 'made for iPod' program". Again, the phrase "authentication chip" was their language, which they are retracting now. Further updates to come.

Update 2: Joel @ BBG says he spoke to Apple, and they denied the fact that there's any encryption or authentication in the chip. What's also interesting is that another tipster says the chip is relatively easy to clone (a fact Apple strangely corroborates), meaning the reason why the manufacturers are licensing and using Apple's version is most likely to get to market as fast as possible to beat their competitors. And, because they like the fact that they have a made for iPod certification.

Update 3: Spoke to someone else at V-Moda, and they assured me that it was not an authentication chip, but a control chip as part of the "made for iPod" program that they receive from Apple. They've also got no plans to go and duplicate the functionality without the "made for iPod" label, as is probably the case with all other major manufacturers.